Executive Summary: Key Legal and Evidentiary Issues

• Dominique Girard contested a revised assessment by the Agence du revenu du Québec (ARQ) that disallowed previously accepted employment expense deductions for motor vehicle use.

• Central to the dispute was Article 63.1 of the Loi sur les impôts, which prohibits an individual from claiming motor vehicle deductions if they received a non-taxable allowance from their employer for that use.
• Girard's employer had declared non-taxable vehicle allowances of $12,333.71, making him ineligible for the deductions under Quebec tax law.
• The ARQ's original assessment was issued following a taxpayer-initiated adjustment request, but was later corrected after receiving information from the Canada Revenue Agency (CRA).
• At issue was also whether the ARQ had the authority to issue a revised assessment; the court confirmed that assessments are not final and may be corrected within the three-year prescription period.
• Girard was unable to demonstrate any error on the part of the ARQ at the hearing.

Facts of the case

Dominique Girard filed his income tax return for the 2022 taxation year with the ARQ. The person who prepared his tax returns identified that, due to a sick leave that year, Girard had incurred vehicle-related expenses exceeding what his employer reimbursed him, and advised him to file an adjustment request at both levels of government. On August 1, 2023, following that request, the ARQ issued an assessment accepting employment expense deductions for motor vehicle use — covering fuel, maintenance, repairs, insurance, registration, and a driver's licence — in the amount of $13,000.12. This resulted in a refund of $1,266.07 to Girard, rather than a payment of $1,366.48 he would otherwise have owed, for a net differential of $2,632.55.

After receiving information from the Canada Revenue Agency (CRA), the ARQ reviewed Girard's file and determined that the deductions it had accepted were in fact inadmissible. On January 10, 2025, the ARQ issued a revised assessment disallowing those employment expense deductions. The net result, including interest and fees, was that Girard owed $3,141.44. Girard filed a notice of objection on January 20, 2025, which the ARQ rejected on July 4, 2025. He subsequently filed a fiscal contestation on July 26, 2025, asking the court to cancel his debt and permanently close the file.

Statutory provision at issue

The key provision governing the dispute was Article 63.1 of the Loi sur les impôts (RLRQ, c. I-3). The first paragraph of that article permits an individual to deduct motor vehicle expenses incurred while performing employment duties away from the employer's place of business, provided the employment contract requires the employee to bear those costs. However, the second paragraph expressly bars such a deduction where the individual receives a non-taxable vehicle allowance — that is, an allowance that need not be included in income under Articles 39 or 40 — or where the individual claims a deduction under Article 62 of the same law.

Court's reasoning and analysis

The court found that Girard was unable to identify any error by the ARQ at the hearing. The evidence showed that Girard had received non-taxable vehicle allowances from his employer totalling $12,333.71 (per Exhibit D-5), which triggered the prohibition in the second paragraph of Article 63.1. Although Girard disputed the amount declared by his employer — arguing he had received only $8,001.21 rather than $12,333.71 — this dispute was with his employer, not with the ARQ, and did not affect the legal analysis. The court found the ARQ's position to be justified and consistent with the applicable legislation.

On the question of whether the ARQ was entitled to correct its earlier assessment, the court held that tax assessments are not final and are always subject to revision. The revised assessment was issued within the three-year prescription period, rendering the correction procedurally proper. At the hearing, the ARQ's representative confirmed that it was prepared to have the matter disposed of without costs.

Ruling and overall outcome

The court dismissed Girard's fiscal contestation in its entirety. The ARQ, as the successful party, prevailed on both the substantive and procedural issues. No monetary award was made in either party's favor, and the matter was disposed of without costs, as the court accepted the ARQ's position that no costs order was necessary.